The Price Elasticity of Demand for Cigarettes by Adults Is

question 42

Multiple Choice

The price elasticity of demand for cigarettes by adults is -1.3 while for young smokers it is -0.4. A tax on cigarettes would lead to which of the following effects?

• A) a smaller reduction in the quantity of cigarettes demanded by younger smokers than by older smokers
• B) the same reduction in the quantity of cigarettes demanded by both age groups
• C) a larger reduction in the quantity of cigarettes demanded by younger smokers than by older smokers
• D) no impact on the quantity of cigarettes demanded by either group
• E) not enough information to predict the impact

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Definitions:

Cognitive Development

The progression of thinking, problem-solving, and learning abilities throughout a person’s life, starting from infancy.

Out of Sight

An expression meaning something is not visible or not present in the immediate area, often implying it is forgotten or ignored.

Egocentric

Characterized by self-centeredness or viewing everything in relation to oneself, often without regard for others.

Gross Motor Skills

Abilities that involve the control of large muscles of the body, such as those used for walking, jumping, and maintaining balance.